Ukraine on the path to improving energy efficiency

Kiev/08.07.19/Turan: Through the EU4Energy project, Ukraine has launched a number of programs aimed at improving energy efficiency in the country.

The EU4Energy project was launched in June 2017 with the aim of raising awareness of bilateral and regional assistance provided by the EU in the field of energy.

It covers six Eastern Partnership countries - Armenia, Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine.

The EU4Energy initiative aims to demonstrate the benefits of EU support and highlight the impact of EU energy cooperation on the daily lives of citizens in the beneficiary countries.

The Government of Ukraine has highlighted the principles of strengthening energy independence and security, de-monopolizing the energy market, creating transparent markets and open access, diversifying energy supplies and improving energy efficiency as a priority for its energy reform.

One of the measures in this direction in Ukraine is to reduce losses during heating of apartment buildings. For this purpose, legal entities are created in the country under the general name "Association of co-owners of an apartment building" (Ukrainian abbreviation "ACAB"). ACAB are analogs of condominiums.

ACAB are legal entities that receive loans from banks to upgrade homes. These loans in Ukraine are called "warm loans". Modernization provides for the establishment of special regulators in each house for uniform distribution of temperature in apartment buildings, and supplying heat to apartments at an acceptable level. In addition, as part of the loans received in the houses, the heat supply systems are updated and the house itself is insulated by means of safe building materials.

Now, with the assistance of the International Finance Corporation (IFC), the implementation of the program for the creation of an "Energy Efficiency Fund" has begun. At a briefing for journalists from the countries of the Eastern Partnership program, among whom was the Turan correspondent, the head of IFC activities in Ukraine, Elena Voloshina, explained that the government had to raise tariffs to market levels to combat heat loss and waste.

"Earlier in Ukraine, the tariff for residents was low, and the government compensated losses from this with high heat tariffs for companies. This created opportunities for corruption. Since 2014, tariffs for residents have increased by more than 100%. At the same time, the government monetized part of the subsidies for payments for heat supply to residents, which gives citizens the opportunity to decide where to send this money," she said.

Mai Nguyen, head of the IFC program "Energy Efficiency in Ukraine", said that this is a completely new tool for Ukraine, which will combine the principles of "warm loans" that were before.

"If in other countries this process took 4-5 years, then in Ukraine everything moves very quickly and within a year the foundation will start its activities. Now there is a process of hiring management. The fund will deal with the allocation of grants and loans for energy efficiency. "

According to her, IFC is simultaneously working with banks, helping them build financial products that will work along with grants. The originality of the project lies in the fact that it will require all participants in the process, including the residents themselves, to make investments.

"The grant will be allocated after the work is done. Experts will check the work done, their compliance with previously announced cases and in the case of a positive assessment, residents of houses will receive grants. $ 265 million will be allocated for these activities. As part of this will be improved 6 thousand homes. Residents of the first 300 houses will receive grants in the amount of 60% of the costs, and the remaining 40%. Energy efficiency of insulated houses will increase by 40-60% and, accordingly, residents of these houses will be able to save so much on payments for the use of heat," said M. Nguyen.

Residents from the insulation of houses have indirect profits. Thus, prices for apartments in such houses are growing immediately by 20% and are popular in the real estate market.

In this case, loans are divided into two types - easy and complex. In the first variant, work is being carried out to establish heat distribution regulators in the apartments, pipe replacement, and in the second option, house insulation, window replacement, etc. are added to it. Loans are issued at 20% per annum.

According to estimates, easy loans pay for themselves in a year, and complex ones in 3-5 years.

The first adviser and head of the department of foreign aid programs in the sector of economic cooperation, energy, infrastructure and the environment of the EU Delegation in Ukraine Johannes Baur, in turn, said that energy efficiency is an important aspect of EU cooperation with Ukraine.

"Currently in the world the largest consumer of heat per capita is Ukraine. This is primarily related to the legacy of the USSR and the lack of investment in this sector. In this case, it is important to reduce dependence on gas supplies from Russia. The EU spent 190 million euros on energy efficiency projects in Ukraine, of which 100 million euros were transferred to the Energy Efficiency Fund. Our other priority is the modernization of buildings in the state budget, such as schools, kindergartens, administrative buildings. In some cases, after modernization, it is possible to save up to 50%. "

The IFC, the EU and the government of Ukraine assume that the Energy Efficiency Fund will begin work this year. -71C-